Construction material player ArisInfra Solutions has received approval from the Securities and Exchange Board of India (SEBI) to proceed with its INR 600 crore public offer. The company submitted its draft red herring prospectus (DRHP) on 14 August 2024, marking a significant step towards its public listing.
ArisInfra Solutions operates in the business-to-business (B2B) sector, focusing on digitizing the procurement process for construction materials. The firm supplies materials, including steel GI pipes, MS wire, MS TMT bars, soil, sand, and wall putty, to real estate and infrastructure developers. Notably, the company has a track record of supplying substantial quantities of materials, such as 1.5 lakh metric tons of bauxite to Kalaburagi and various aggregates to the Konkan Division.
ArisInfra Solutions IPO Approved: Use of Issue Proceeds
Following the SEBI approval of ArisInfra Solutions IPO, the company is set to raise INR 600 crore through issuance of fresh shares. The proceeds will be allocated primarily for repaying outstanding borrowings estimated at INR 204.60 crore and funding working capital needs amounting to INR 177 crore. Additionally, ArisInfra intends to invest INR 48 crore in its subsidiary, Buildmex-Infra Private Limited. The remaining funds will be utilized for general corporate purposes and potential acquisitions.
Impressive List of Founders and Investors
The company promoters include Ronak Kishor Morbia, Bhavik Jayesh Khara, Siddharth Bhaskar Shah, Jasmine Bhaskar Shah, Priyanka Bhaskar Shah, Bhaskar Shah, Aspire Family Trust and Priyanka Shah Family Trust. Siddharth Bhaskar Shah is also associated with PharmEasy (API Holdings) as Managing Director and CEO.
Among its biggest external investors are Kedar Mankekar (10.27% on fully diluted basis) and Think Investments (8.65% on fully diluted basis). Incidentally, Think Investments is an investor in several companies which have either launched their IPOs recently or plan to launch. These include PharmEasy (API Holdings), NSE, FirstCry, and Swiggy.
The IPO will be managed by JM Financial Limited, IIFL Securities Limited, and Nuvama Wealth Management Limited as book runners. Link Intime has been appointed as the registrar for the offer.
According to IPO Central’s Data Center, as many as 18 companies related to construction and construction material sectors launched their IPOs since 2018. These IPOs rewarded investors with average 12.6% returns on the listing day even though 6 IPOs closed in negative territory on the first day. Given this backdrop, investors are naturally excited about the IPO approval of Arisinfra Solutions. Despite this rich history of the sector, ArisInfra is first of its kind as most of the IPOs in this sector were of construction and infrastructure players, making ArisInfra the first construction sector vendor to tap the primary markets.
This upcoming IPO reflects a growing trend in the construction materials sector as companies seek to capitalize on the increasing demand for infrastructure development in India. For a more comprehensive analysis of the IPO stay tuned with IPO Central.
